Since there are often tax obligations when settling an estate it is important for an executor to know what needs to be filed.
Knowing how to properly handle tax issues when settling an estate is one of an executor’s key responsibilities. Not handling it properly can result in the executor having personal liability.
Bluffton Today recently published an article entitled “Tax filing for the deceased,” providing a good overview of an executor’s tax responsibilities.
First, an executor needs to ensure that the deceased has filed any required returns for previous years. If previous returns have not been filed, then the executor must do so.
Second, the executor needs to file the deceased’s final 1040 for the final year of life. For tax purposes, the year is from Jan. 1 until the date of death. The executor will need to get a certificate to show his or her appointment and attach it to the tax return. If any refund is due, the executor must also file a Form 1310.
Finally, the executor may need to file a form 1041 return for estate assets accumulated after the deceased passed away. A Federal Identification Number will need to be obtained for the estate. Of course, if the estate is large enough, then estate taxes will also have to be paid.
Working with an estate attorney to properly handle issues could be a major help to an executor.
Reference: Bluffton Today (Feb. 3, 2016) “Tax filing for the deceased,”